Financial Sector Sinks Friday Led by Big Banks

Brittney Barrett |

U.S. financial stocks declined by -1.33 percent on Friday in the wake of government data indicating the cost of energy continues to be detrimental to the economic recovery and contribute to inflation that exceeded analyst expectations. The entire market took a dive in the aftermath of the announcement that American consumers paid for 0.4 percent more for goods and services last month, largely due to the high price of gasoline. Financials sank with most other sectors with Goldman Sachs, Inc. (NYSE: GS), Citigroup Inc (NYSE: C) and J.P. Morgan Chase & Co (NYSE: JPM) leading declines.



Earlier in the day, attitudes toward Goldman Sachs were especially negative, with a flurry of reports asking whether the bank’s long-running reign on Wall Street might be coming to an end. Shares fell 6.5 percent in morning trading but disproved sentiments in the afternoon when it pared most of its losses and closed only 0.90 percent lower. Goldman is currently under fire with the U.S. Justice Department, who are considering suing the megabank on grounds that it improperly handled certain CDO transactions.

Despite   declaring its first dividend in two-plus years today, shares of Citigroup also sank by 2.10 percent. The bank stated intentions to pay a penny per share on June 17; but analysts predict a long wait before the bank will be able to pay dividends in line with competitors. Citi’s payout, though a step in the right direction, is still a distance from the likes of JPMorgan Chase & Co. Citi’s dividend is a tenth of a percent of a share compared with J.P Morgan’s 2.3 percent.

Regardless, comparatively impressive dividends didn’t help shares of J.P Morgan today. They declined 2.3 percent, a significant drop, but still an improvement from midday, when they were down 4.4 percent before making a comeback.

Shares of Bank of America Inc.(NYSE: BAC) also fell, siding 2.21 percent on Friday. Morgan Stanley (NYSE: MS) lost 1.55 percent both on a seemingly negative sentiment across Wall Street.
The Financial Select Sector SPDR ETF was among the most active stocks in the financial sector today, falling 0.77 percent on high volume. Percentage wise, Janus Capital Group Inc. (NYSE: JNS) took the deepest plunge today, down 4.47 percent for the day. Bucking the trend of declines on Friday, New 1 UEPS Technology, Inc. (NASDAQ: UEPS) added 5.49 percent to closes at $8.84.

 

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